Eidos 'seeks £50m from shareholders'

Microsoft's X-box games console represents an opportunity for Eidos

Eidos, the computer games firm which created Tomb Raider heroine Lara Croft, is to ask investors for extra cash to fund an attack on new markets, reports have said.

Eidos is to follow companies such as British Telecom to launch a rights issue, a process in which a firm offers shareholders extra stock at a discounted rate, newspapers said.

The new shares could be offered at a discount of up to 50% to Eidos' share price at the time the issue is announced, the paper reported.

Some £50m raised by the exercise would fund Eidos' campaign to develop games for two next generation consoles, Microsoft's X-box console and Nintendo's Gamecube.

Eidos is expected to announce the rights issue alongside its annual results, expected within the next three weeks, The Independent newspaper said.

Investors warned

In its last results statement, covering April to December 2000, Eidos revealed that has been hit by delays in the roll-out of new games console systems.

"The company remains cautious about trading over the next nine to 12 months," chairman Ian Livingstone said.

"There continues to be a lack of visibility through to Christmas 2001."

Pre-tax losses over the nine months widened to £68m, including an exceptional charge of £55m, from £12.6m in the same period in 1999.

Sector hopes

But Eidos shares, which have proved among the most volatile listed on London's stock exchange is recent months, have recovered from less than 170p in early April to more than 320p last week over hopes for the computer games market.

Prospects for the industry were improved earlier this month when Sony said it had solved distribution problems which have hit the number of its PlayStation 2 consoles reaching shops.

Eidos shares closed at 297p in London on Friday.